Marriage Allowance

From the 6th April 2015, the Marriage Allowance comes into effect which will allow a spouse or civil partner who does not pay tax, or does not pay tax above the basic rate of income tax, to transfer up to £1,060 of their personal tax-free allowance to a spouse or civil partner, as long as the recipient of the transfer does not pay more than the basic rate of income tax. This could represent a saving of up to £212 per year for eligible couples.

Eligible couples can register for the marriage allowance at www.gov.uk/marriage-allowance. There’s guidance for couples to check their eligibility for the new allowance, and registration only takes about three minutes. From April, HMRC will begin inviting those customers who have registered their interest to be among the first to apply using the new online service. Customers who choose not to register early, however, will not lose out. Instead, they will be able to make an application later in the 2015-16 tax year and still receive the full annual allowance.

To support the change, both the transferor and recipient’s tax codes will be amended. This in turn introduces two new tax code suffixes as follows:

M will be used for the spouse/civil partner receiving the transferred allowance

N will be used for the spouse/civil partner transferring the allowance

These new tax suffixes will not be used on tax codes prior to April 2015, but will be used on P6 coding notices from April and, in due course, P9 and P9X uprating notices.